Like Field, Damian Davies of The Timebank also points to the changing landscape of advice over the last ten years. “Back in 2011, advisers were coming to terms with the idea of depolarisation and were staring down the barrel of RDR. It was a massive change” he comments. “At the same time, clients seeking advice must have felt a bit lost too, as most of the large high street banks closed their advice divisions. Now, 10 years later and with new management coming up with radical new ideas, banks are opening up their sales teams again!”
Amyr Rocha-Lima, Partner at Holland Hahn and Wills and Chairman of the CISI Financial Planning Forum committee focuses on the impact that the changes over the last ten years have had on clients, commenting “Our value as financial planners comes into play when we gently invite people to think about what they need to think about – how to protect their assets in case of an early death or diagnosis of a critical illness, how to fund a retirement that might last 30 years and how to leave a tax-efficient legacy to their loved ones and the charitable causes they care about.
“After all, we may not have the answers people want (like what will the market do next? etc.), but, much more importantly, we have the questions they need.”
As well as impacting clients and individual advisers, Davies sees some key changes brought about by the RDR for businesses across the whole of the advice sector and for their client propositions. “RDR turbocharged some of the more familiar parts of today’s industry like CIPs and client service propositions” he says. “Whilst financial ‘planning’ has been around since the 80s, a post-RDR world encouraged firms to adopt it. However, I am not sure the regulator wanted RDR to see a mass adoption of assets under management (AUM) fees, particularly when you look at some of the recent regulator comment around adviser charging.
“Fast forward to 2018 though, to me it felt a little like MiFID II was brought in to mandate some of the things that the regulators had hoped would happen off the back of RDR that didn’t get widely adopted, like annual suitability. One thing’s for sure, that is that fee disclosure is starting to bring the cost of advice into sharp focus.”
Shared optimism
Eddie Grant, Director, Technical Connection, and director at St. James’s Place responsible for professional development, was president of the PFS in the penultimate year before the introduction of the RDR. He is clear that “The optimists who focused on better client outcomes have transformed the profession. Many have surpassed the level 4 benchmark, achieving Chartered status and beyond. Investment in client-centric and engaging planning has showcased the non-financial benefits of advice, a shared responsibility with a trusted financial planner, supporting clients in all circumstances. The legacy of this period will be how an industry continued to evolve into a profession and realise the shared optimism of many.”
Still work to be done
Barry Horner is CEO of Paradigm Norton Financial Planning and a past-President of the Institute of Financial Planning (IFP), the professional body for financial planners which merged with the Chartered Institute for Securities and Investment (CISI) in 2015.
Horner believes that there is still work to be done before we can confidently proclaim UK financial advice as a fully-fledged profession. He comments “Wikipedia reminds us that a ‘profession’ is an occupation founded upon specialised training, the purpose of which is to supply objective counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain.
“Are we there yet? I would say- No, but we are well on the journey and we have certainly come a long way since the ‘wild west’ days before the 1986 Financial Services Act.
“We have a code of conduct, a generally accepted method of being remunerated by fees and the vast majority of firms are looking for their key financial planners to be either Certified Financial Planner professionals, Chartered or preferably both. Thankfully we now have some of the basic building blocks in place.”
Amyr Rocha-Lima is another with positive leanings as he frames his view in the context of the financial planning process. He comments “The economic, market and credit cycles – as we’ve recently been forcibly reminded – don’t actually change very much over time. And human nature, principally through the amygdala’s so-called “fight or flight” response, doesn’t change at all. But what does change is life.
“What this means is that the product-led dogmas of the past are inadequate to cater for the dynamic financial planning needs of modern life.
“The implementation of the RDR and its attempts to ensure more transparency within the financial services sector has not come without its fair share of ‘teething problems’, but it has indeed helped turn financial planning into a true profession.”
So there’s another advocate for profession status.
